BBVA
Banco Bilbao Vizcaya Argentaria, S.A.
$25.02
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 23.1% below fair value
You pay
$25.02
Bear
$22.28
Fair
$32.54
Bull
$38.70
Bear
$22.28
-11.0%
ROTCE 14.5% → 2.01x TBV
Fair
$32.54
+30.0%
ROTCE 19.3% → 2.94x TBV
Bull
$38.70
+54.6%
ROTCE 22.2% → 3.50x TBV
Adjust Assumptions
19.3%
9.2%
Key Value Driver
ROTCE (19.3%) vs. cost of equity (9.2%)
Implied Market Multiple
2.26x
Summary
With ROTCE of 19.3% vs. 9.2% cost of equity, fair P/TBV is 2.94x on $11.06 tangible book, implying $32.54 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Financial statements were converted from EUR into USD using EURUSD at 1.1212 USD per EUR.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly